LNG Supply Gap¶

Category: Quantitative
Source: Wood Mackenzie Horizons Report (Massimo Di Odoardo, VP Gas & LNG Research), via gCaptain, May 21, 2026

Description¶

The liquefied natural gas (LNG) dimension of the Hormuz crisis — a supply gap that persists even in the best-case diplomatic scenario and has structural implications for global energy transition.

Key Numbers¶

The LNG Gap¶

Unlike crude oil, where reopening Hormuz would quickly restore flows, LNG infrastructure requires time to restart. Even in the "Quick Peace" scenario:
- LNG markets remain tight through summer 2027
- Gulf export facilities need time to recover
- New supply projects face delays

Permanent Capacity Loss Scenario¶

In the extended disruption scenario:
- Some of Gulf's 85 mt/yr existing LNG capacity could be permanently lost
- ~75 mt/yr of projects under construction could face multi-year delays
- This would fundamentally reshape global LNG trade flows

Structural Implications¶

• Accelerates diversification away from imported LNG
• Supports coal resilience (coal-to-chemicals workaround in China)
• Faster growth in renewables/electrification as energy security strategy

Significance¶

No other source has quantified the 80 mt/yr LNG gap and its structural implications for global energy transition. This is unique to WoodMac's analysis and represents a long-term structural shift beyond the immediate crisis.

Relationship to Other Concepts¶

• Extends "Hormuz Scenario Tree" (same source) with the gas-specific dimension
• Complements "Demand Destruction Dual Risk" (Goldman Sachs) — the LNG gap affects petrochemical production, which Goldman flags as a demand destruction channel
• The "permanently lost" LNG capacity is a structural long-term claim unique to this source